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First Click, Maryland -- Pensions key to budget fight

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Tuesday, March 23, 2010:

The Agenda
Aaron.jpg
On Tuesday, the Maryland Senate will begin its first floor debate on a $31.9 billion budget bill completed late last week. If all goes well, Senate President Thomas V. Mike Miller Jr (D-Calvert) says the chamber will vote on the spending plan Wednesday night, sending it to the House of Delegates, which faces an April 5 deadline to pass it.

Strong disagreement is expected over at least a dozen of the 185 amendments that the Senate Budget and Taxation Committee passed to Gov. Martin O'Malley's spending plan. Debate could bog down, for example, over the committee's plan to halve the governor's proposed spending on the bay fund and stem cell research, or to rely on more than $1 billion in transfers, borrowing and other one-time fixes to help close Maryland's nearly $2 billion budget gap.

Currie.jpgBut ironically, the issue that most threatens the budget timeline is an amendment that would not affect one penny of state funding in the fiscal year beginning in July. The Budget and Taxation Committee, chaired by Sen. Ulysses S. Currie (D-Prince George's), on Friday broke with decades of tradition of avoiding a hot-button issue with the state's teachers and counties. The committee voted to slowly shift a larger share of teachers' retirement costs to counties, ending a practice of state subsidy for local education retirement costs that Maryland budget officials have warned will only continue to eat up an unsustainable amount of Maryland's general fund.

Nothing would change for schools and counties in the next budget year under the proposal the Senate will vote upon. But in fiscal year 2012, local boards of education, community colleges, and libraries would have to begin setting aside 1 percent of teachers' and librarians' payroll costs for retirement. In 2013, that figure would rise to 3 percent, and in 2014, level out at 5 percent.

Currently, the state sets aside 14.3 percent of every Maryland teacher's salary to pay for his or her pension costs. Counties pay the teachers' social security -- roughly 7.7 percent of salary -- but nothing else toward its workers' retirement.

With the gradual increase, counties would share an equal amount of such costs by 2015 -- and save the state more than $900 million in the process.

As it is, Senate officials have estimated that Maryland will pay about $843 million of its $13.2 billion general fund to cover teacher pension costs in the coming budget year. And that's not even at a rate that fully funds such obligations. To pay for 100 percent of future teacher retirement costs, Maryland next year would have to set aside $1.2 billion, or nearly the same as what it currently spends to run the entire University System of Maryland.

Several Democratic lawmakers and the state's teachers unions have already voiced concerns with the proposal, saying it could cut into what local governments can afford to pay much-needed teachers.

If it makes it out of the Senate, the fate of the amendment remains unclear in the House. But some powerful lawmakers who back the proposal warn that if teachers' unions and counties scuttle the proposal this year, they may be less happy with the next version lawmakers consider following elections in November.

-- Aaron C. Davis

News You Should Know

After much talk, Senate poised to pass cell phone restrictions
Pipkin chamber.jpgThe Maryland Senate on Monday night advanced a measure that would require drivers to use a hands-free device while talking on cell phone. The chamber voted 25 to 21 to accept a committee recommendation on the bill before rejecting more than a dozen amendments designed to soften it, most of them offered by Sen. E.J. Pipkin (R-Queen Anne's). One amendment accepted by senators reduces the fine for a first offense from $100 to $40. That was offered by Sen. Alex X. Mooney (R-Frederick). Pipkin argued that the bill's prohibition on using one's hands was too broadly written and unsuccessfully sought exceptions for adjusting the volume, enabling the speaker phone function and playing songs on a phone, among other things. A final Senate vote is expected in coming days. A similar bill is pending in the House. -- John Wagner

Republicans make last stand on unemployment insurance
Thumbnail image for Thumbnail image for Thumbnail image for O'Donnell mug.jpgA Senate-approved package of changes to help bring Maryland's bankrupt Unemployment Insurance fund back in the black survived several attempts by Republicans in the House to alter the plan on Monday night. House Minority Leader Anthony J. O'Donnell (R-Calvert) sought to undo an O'Malley administration proposal to take roughly $127 million in federal stimulus money in exchange for Maryland agreeing to permanently change its unemployment system to make it easier for workers to apply for benefits. The change would increase costs to Maryland employers by about $19 million annually. O'Donnell argued that the one-time, federal "carrot" wasn't worth the long-term costs. More than 30 states, including Virginia, have taken the federal money. -- Aaron C. Davis

Wine shipment bill takes detour to Senate floor
Thumbnail image for Zirkin mug.JPG"Maryland lawmakers are making last-ditch efforts to lift the state's ban on wine shipments before the 2010 General Assembly session ends next month," writes The Examiner's Hayley Peterson. "Bills that would end the ban remain tied up in committee, but Sen. Robert A. Zirkin, D-Baltimore County, has managed to induce floor debate on the issue with an amendment to an unrelated bill that would permit wine shipments. The Senate plans to take up the issue Tuesday. ... More than 100 lawmakers from both houses support ending the ban, but the state's powerful liquor lobbyists are suspected to be puppeteering the vote with campaign donations to keep consumers buying locally."

State fights a new war on oyster poaching
Oyster war.jpg"The first time there was a war over the Chesapeake Bay's oysters -- in the 1800s -- it started because there were so many of the shellfish. For a share of the fortune on the bay's floor, watermen fought police and one another with rifles and cannons," writes The Post's David Fahrenthold. "This year's oyster war is being fought with cellphones, glow sticks, fast boats and night-vision technology, but for the opposite reason."


Quotables

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Mike Miller mug.jpg"Tomorrow's going to be an unbelievable day here."
-- Senate President Thomas V. Mike Miller Jr. (D-Calvert), offering his chamber a preview of the work load expected Tuesday, which he said will resemble that of a full week

Thumbnail image for Thumbnail image for Anthony Brown.jpg"We have a little hammer and we have a field of nails out there. If we had a little bit bigger hammer we could get more accomplished with each stroke."
-- Lt. Gov. Anthony G. Brown, making the case to The Baltimore Sun for a bill designed to crack down on Medicaid fraud.

"That practice is one of the more foolish ways Maryland underwrites the cost of K-12 public school education."
-- a Baltimore Sun editorial, describing the current system under which the state picks up the full cost of county teacher pensions.

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Trust First Click for critical news and analysis you need to navigate Maryland politics. Each weekday, First Click brings you The Agenda, a concise, forward-looking analysis of the day's top development in politics or policy. "News You Should Know" breaks down top stories from across the state. And Look Ahead, Unspun, News Makers, and Week in Review keep you up to speed with power brokers in Annapolis and beyond. Want First Click on the go? Sign up for our free e-mail edition, and get the news delivered to your inbox or mobile device.

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By Aaron C. Davis  |  March 23, 2010; 6:45 AM ET
Categories:  Aaron C. Davis , First Click , John Wagner  
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